Life is tough on the front line of accountancy. For more than five years, our intrepid correspondent has been bringing us news and views from a typical West Country practice.
P11D rage hits the West Country
OK, I exaggerate a little - but they're getting me all hot and bothered.
When I ran my own practice I had a few simple rules: we didn't act for hairdressers or taxi drivers, and we didn't do company annual returns or P11Ds. Currently annual returns are creating continuous hassle, thanks to Companies House threatening-sounding "reminder " letters, which most clients interpret as a reminder for something that we have omitted to do, whereas they are simply a reminder of the approaching due date!
But P11Ds are worse. And when you combine them with company-provided mobile phones they're a nightmare.
It seems to me there is one inescapable fact about P11Ds - you can't get them right. There is always an expenses claim or some minor benefit that a client will fail to tell you about and, hey presto, an incorrect return! Clients can't understand what these returns of business expenses are for, but they take ages to compile so it's a struggle to make any money out of them.
And then there's the phone issue. For a start, is it a basic phone or a smartphone, because the latest advice seems to be that the latter is not a phone at all but a computer - which means no P11D exemption. That just about covers every current mobile phone, I don't think you can buy one that can't access the Internet these days. So the benefit in kind is the standard 20% of the cost of supplying the phone. The trouble is, how do you work that out? A client called me today for help - they have a company contract which pays for a dozen or so phones with a block of included calls that they share across them all. Several phones live in the delivery vans so I'm not going to try to calculate a benefit on those, but how are we meant to calculate, for example, the benefit on the MD's BlackBerry? The company didn't pay a capital sum for it as it's included in the monthly contract amount, and the bills don't itemise the cost of calls made by each user as most are within the included allowance.
My conclusion is that we ask all the smartphone users to confirm that they have made no or only incidental private use of their phones and then ignore them on the P11Ds. I have also recommended that the company reviews their contracts of employment and specifies that company mobiles may not be used for private calls or Internet use.
I just need to work out how much to charge the company for helping them file incorrect P11Ds...